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I was on a panel of a webinar, The Future of Manufacturing with Andrew Zanelli, president of VCC, Michael Knight, president TTI Semiconductor Group, and Seth Denson, co-founder of GDP Advisors. It was a lot of fun, and we talked about the coronavirus, reshoring, cost leadership, innovation, and other topics. Are you interested in what the future might look like and how you can position your company and career successfully?

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What Should We Consider and/or What Impacts Could Arise?

There is no doubt there is a renewed interest in reshoring and sourcing manufacturing closer to the customer. All panelists agreed that labor cost has reduced significantly in terms of relevant factors to consider in evaluating manufacturing and supply chain strategy.

China’s labor costs have continually risen, leading progressive companies to move to Vietnam and other Asian countries to chase lower labor costs if labor is a significant factor in total cost of their products. Mexico is gaining steam as well as the latest statistics show their fully burdened labor costs are often lower than China.

Advances in technology have reduced the labor component in the total cost of products, sped up the turnaround time and enabled greater customization on demand. Robotics, additive manufacturing, automated equipment, autonomous vehicles are just a few of the advances.

The time component is increasing in importance in today’s environment where Amazon-like customer service is the norm. Lengthy lead times will lead to a loss in customer demand.

Although cash is always king, during the pandemic, it has risen in importance. Product tied up in the supply chain which is typically 3 months minimum for Asian supply to the U.S. equates to dollars tied up that cannot be invested elsewhere.

There is a higher likelihood of disruption the further away production is from customer demand and the more steps to the supply chain (such as ports, trucks, sailing through unfriendly waters).

Whatever was true last quarter or last month is no longer true. Continually reevaluate your end-to-end supply chain requirements. I’ve addressed this topic as well as your strategy, priorities, key trends, and your restart recipe for success in my eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19. If you are interested in a rapid assessment, please contact us.

CLAREMONT, CALIFORNIA – May 27, 2020 – Manufacturing and Supply Chain Expert, Lisa Anderson, MBA, CSCP, CLTD, president of LMA Consulting Group Inc., predicts that a proactive understanding of customer demand and diversification within the supply chain will prevent a next round of guffaws as the effects of COVID-19 disruptions to the supply chain begin to subside and the world faces the uncertainty of the return of COVID-19. LMA Consulting Group works with manufacturers and distributors on strategy and end-to-end supply chain transformation to maximize the customer experience and enable profitable, scalable, dramatic business growth.

The importance of the supply chain took front and center stage as the COVID-19 pandemic raged throughout the world. “The wrong products were in the wrong places at the wrong time. From bumper crops of vegetables, eggs and other foodstuffs to the infamous toilet paper capers, consumers became very aware of the fine balance within the worldwide supply chain. Crops and dairy products originally destined for restaurants soon saw their demand disappear while grocery stores had to limit demand to keep up. Hoarding of consumer paper goods like toilet paper and paper towels caused weeks’ delay in replenishments. And, after nine weeks of shortages, manufacturers are still having challenges in aligning demand with supply,” stated Ms. Anderson.

The key is future proofing the supply chain so that it is resilient to disruptions. That requires taking a proactive approach to putting strong secondary and tertiary backups in place for every element within the supply chain. “The supply chain is both simplistic and complex. It is all about satisfying the customer, even before they know what they want. The complexities start when managing equally important priorities. From developing strong relationships with core suppliers and identifying customer buying patterns to forecasting inventory needs to satisfy demand, the details are many, balanced with having the right products in the right place at the right time for the right price, all while being profitable. COVID-19 has highlighted that even if your supply chain is complex, it also must be nimble,” she continued.

“We’ve seen the consequences of wringing too much out of the supply chain. The winners have been those manufacturers who had strong relationships with multiple suppliers, good insights into customer demand, multiple options for transportation and dedicated teams willing to pivot to new ways of doing business to keep and expand the business. We have seen new business opportunities emerge and stalwarts struggle. The good news is that we have, once again, rallied to a challenge,” she said. The video conferencing tech explosion, brick and mortar retailers becoming online behemoths to satisfy at-home demand and manufacturers retrofitting production lines to make ventilators and sanitizers have demonstrated the strength, innovation and ingenuity of manufacturing during a crisis. “Now, it’s time to take what we have learned and quickly adapt it to the new un-normal. Manufacturers are already making inroads with new suppliers, forming unusual partnerships to expedite progress, building speed and resiliency into their operations, pursuing industry 5.0 and reshoring production closer to ever-changing customer demand. As much as these initiatives sound proactive and thorough, they are not enough. Manufacturers need to get ahead of the curve and create disruption to thrive in this new un-normal she concluded.

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation. She focuses on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, 50 ERP Influencer by Washington-Frank, a top 46 most influential in Supply Chain by SAP and named a top woman influencer by Solutions Review. She recently published, I’ve Been Thinking, 101 strategies for creating bold customer promises and profits. A regular content contributor on topics including a superior customer experience with SIOP, advancing innovation and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, tED magazine and the Wall Street Journal. For information, to sign up for her Profit Through PeopleTM Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.
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Media Contact Kathleen McEntee | Kathleen McEntee & Associates, Ltd. | p. (760) 262 – 4080 | KMcEntee@KMcEnteeAssoc.com

I was on a Zoom call yesterday (one of 9), and we broke into groups to answer the question of what we most want to do post lockdown. Haircuts beat going to the bar! It is especially tough when you are on video 10 to 12 hours a day! I think the group feels a bit like this woman…

The same issue is occurring in business. What type of maintenance are you deferring due to lockdown? Should you continue to defer this maintenance type activity?

One Tip to Implement This Week:

Of course, the answer is “it depends”. We shouldn’t do everything just because we used to do it; in fact, the lockdown has created the opportunity to reexamine our focus. Take advantage of this opportunity to figure out where to focus. Perform a rapid assessment, prioritize what you should pursue and proceed with essential go-forward maintenance. If you’d like to hear more about these priorities, read my eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19

We have also launched a rapid Future-Proofing Manufacturing & Supply Chain assessment if you’d like assistance with the process. Contact us if you are interested. Stay safe and healthy. We continue to post coronavirus resources, write blog articles on navigating coronavirus as well as “beyond lockdown” strategies, and we are sponsoring APICS Inland Empire‘s “Navigating Through Volatility” webinar series. Join us and learn more here.

Since the lockdown will carry forward for several months in some form or fashion, we will be expanding our webinar series and providing additional resources to help you think about how to thrive in this pre-vaccine environment. Let us know if you have topics you’d like addressed. We would love your feedback.

During turbulent times, relationships move faster than at any other time. Will they move in a positive direction or a negative one? That is the only question. In fact, customers will be reevaluating what they buy and when they buy it. Consumer behaviors are evolving and business buying behaviors are evolving. Are you in the loop with your customers as to what is top of mind? Listen to our conversation with an expert in creating customer loyalty on our Navigating Through Volatility webinar series on creating a Forever Transaction.

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What Should We Consider and/or What Impacts Could Arise?

As a customer, I have less patience with slow response when I need it the most. Our customers are no different. On the other hand, a few suppliers stand out in my mind in making my life easier and being ahead of the curve. I will remember that as the pandemic winds down. Identify your top customers and make sure your relationships are moving rapidly in a positive direction. In fact, it is appropriate to drop low priority or unprofitable customers. Otherwise, your key customers might not gain the value they would otherwise.

Look for opportunities to provide value. Ask questions to understand your key customers’ current situation and what would help. Simply look for opportunities to help your customers be successful. If you can offer help and/or ideas, it can go a long way! Don’t worry about expanding business during your conversation. Provide value and your customers will be more successful. When your key customers are successful, you’ll be more successful as well. I’ve addressed this topic as well as your strategy, priorities, key trends, and your restart recipe for success in my eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19

Please share your stories, challenges, ideas and successes. Contact us and please join in our free webinar series and listen to our archives.

Do you consider your technology leader an integral member of your executive team? If not, why not? Prior to the coronavirus pandemic, technology was starting to take over the world. With the acceleration of e-commerce, the expanded use of ERP systems, artificial intelligence applications to create predictable demand and automate repetitive tasks (and of course Amazon Alexa), the internet of things to connect objects and applications such as those used in autonomous trucks, blockchain to trace the chain of custody from farm to table across the globe and robotics to automate manufacturing and warehousing processes, IT was critical.

Now that the pandemic has hit, technology is playing an even more pivotal role. The world has gone remote. Users are gaining comfort with technology at a record pace. Additionally, because there are many complications in navigating coronavirus with employees (rules, regulations, social distancing protocols, and many more), executives are starting to see a greater advantage in proceeding more quickly with their technology roadmaps. By taking advantage of the opportunities to grow the business and improve the customer experience, employers can reallocate employees from repetitive tasks (which also can require close proximity to one another) to ones that will add value to the business.

Read our eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19to dig into these concepts further as well as to debate whether to move forward with ERP upgrades or hold off to preserve cash and to be reminded of the critical importance of cyber security and protecting against cyber criminals. Also, one of our favorite topics is addressed, the MacGyver approach to moving forward with your systems infrastructure while navigating the slow ramp up following the pandemic. It is NEVER all or nothing. Invest smartly. Utilize already-existing talent and tools. You’ll speed on by your competition.

Join our Navigating Through Volatilitywebinar series to learn about how ESRI is using cutting edge technology and location intelligence to drive supply chain resilience and recovery. It certainly will stretch your mind when it comes to using IT/ technology to drive business value, and more importantly, value to the community. Perhaps it will inspire you to think about technology differently.